Gannett Co. gci, the largest newspaper publisher in the United States, said Friday that its fourth-quarter profit dropped 31% on a decline in broadcasting revenue and weak newspaper ad sales.
The adjusted results narrowly topped Wall Street's expectations.
The publisher of USA TODAY and USATODAY.com said earnings sagged to $245.3 million, or $1.06 a share, for the three months ended Dec. 31 from $353.5 million, or $1.51 a share, a year ago.
Excluding a non-cash impairment charge, profit declined to $1.28 per share from $1.47.
Analysts polled by Thomson Financial expected net income of $1.27 per share.
Gannett said its 2007 earnings also were down compared with a year ago because the 2006 fiscal year and fiscal fourth quarter were both one week longer.
Quarterly revenue fell 12% to $1.9 billion from $2.2 billion in the 2006 fourth quarter. The company blamed the fall on lower advertising revenue. Analysts expected sales of $1.98 billion.
Gannett's newspaper revenue was $1.7 billion. Advertising revenue was $1.2 billion, down 12% from $1.4 billion a year ago. The flagship USA TODAY newspaper saw advertising revenue fall 16.7% in the fourth quarter. Overall newspaper circulation revenue declined 7% to $313.2 million.
The drop in political advertising revenue in the non-election year of 2007 vs. 2006 was especially pronounced in the broadcasting unit, where it fell 22% to $212 million.
"In the fourth quarter, we faced a challenging advertising environment, tough comparisons, which included an extra week in 2006 and the relative absence of election-related advertising in broadcasting," Chairman, President, and Chief Executive Craig Dubow said.
For all 2007, Gannett earned $1.06 billion, or $4.52 per share, down from $1.16 billion, or $4.90 a share, in 2006. Revenue fell to $7.4 billion from $7.85 billion in 2006.
Gannett, like other media companies, has suffered a profits slide as advertising wanes, especially real estate and job ads that have slowed with the housing slump and decelerating economy. During the year, the company trimmed 43 jobs at USA TODAY, or almost 9% of the newsroom staff.
In December, Gannett announced plans to print a lifestyle magazine geared toward wealthy readers four times a year. It also announced a joint venture with Tribune Co. in October to expand a network of local entertainment websites.
Aside from USA TODAY, Gannett publishes 85 other daily newspapers and nearly 1,000 other publications.
Gannett shares rose 11 cents to $37.04 in premarket trading.